In business, acquiring customers is just the beginning; the real magic happens in retention.
Loaded question: What's the only thing harder than getting someone to patronize your business?
Answer: Getting them to come back.
Customer retention is one of those fascinating business concepts often talked about incessantly in the corporate setting and completely overlooked in the realm of the smaller enterprise. Large and highly visible business entities embrace retention out of absolute necessity. Having tens of millions of dollars invested in their infrastructure compels these corporations to be ever-vigilant, always watching what lures are being dropped by their competition to entice customers to switch ranks.
The small business experience should logically be a microcosm of what happens at the much larger corporate level, but reality often tells a different story. The demands of trying to establish a thriving business can end up being the exclusive focus of the fledgling entrepreneur. The vast array of setup challenges that anyone faces when starting a new endeavor can cause the business owner to fixate entirely on the immediate demands that must be addressed to open the doors to the public. The long, ponderous "to-do" list looms at the forefront of every decision and can sometimes become the extent of what defines the business owner's efforts.
Because launching a new enterprise requires such a deep investment of time, money, & diligent effort, many entrepreneurs who check off all the items on that list can lull themselves into a false sense of security. Once everything is in place and customers or clients come through the doors, it can be tempting to feel that the mission has been accomplished. The irony is that officially doing business is only the embarkation point – the real journey is everything unfolding as you move forward. And therein lies the insidious trap that can derail even a seemingly successful business. A scenario where you have people rolling in the door and a steady stream of sales is wonderful while it lasts, but intentionality is the only way to guarantee that it's sustainable but capable of growth as well.
Even so, mundane business efforts can fly in the face of that intentionality. As a business owner, a certain myopia starts to creep in. Having surmounted all the obstacles that stood in the path of simply going into business, some entrepreneurs put blinders on and stare only at daily operations. This can sometimes be a difficult conundrum to spot because conscientiously monitoring what your business is doing is the most responsible and constructive of approaches. But limiting yourself to keeping the boat afloat can inadvertently cause you to start taking on water. The key to the genuine longevity of your business is to be forward-looking, not only in terms of innovation but also very much from the perspective of relevance.
Especially if you happen to be in a highly competitive field or in a challenging marketplace where the particular goods or services you're offering are already being provided by other established businesses, you first need to demonstrate what makes you meaningfully different. Assuming that you've done your due diligence to research the viability of establishing your business in the first place, part of that process undoubtedly involved showing what makes your offerings more valuable than those of your competition. Making the sale – whatever that looks like in your sphere – is crucial for success. But what you do next is even more critical.
Despite what the initial interaction with a customer or client is, the people we serve can actually turn out to be quite fickle. Someone loves us today because we're providing them XYZ at a lower rate than the guy down the street, but what about tomorrow? At some point, that customer might end up outgrowing us. What someone needs today is usually a far cry from what they'll need a week from Thursday. To truly stand out in the marketplace, we must understand how to keep providing something of value long after logging that initial sale.
And so, customer retention needs to be carefully interwoven into our business model rather than just tacked on as an 11th-hour afterthought. Someone chose us initially because we were more attractive than our competition, but the popularity contest is, unfortunately, never-ending. Statistically, fewer than 20% of businesses put more emphasis on keeping customers than securing them in the first place. As a result, most enterprises find themselves in the unenviable position of having to constantly court new business prospects. Some receiving goods or services might continue patronizing the company by default. Still, many others will quickly vanish if they find a better deal or a more comprehensive service offering elsewhere.
What's often overlooked by those who might consider retention to be one of those "nice to have" items is that retaining customers will yield new business. Positive word-of-mouth is one of the most potent and far-reaching marketing tools, made all the more impactful due to having no associated operating cost. If we make an incredible impact on the people we serve, they'll be motivated to tell those in their peer group about their experience. If we can go the extra mile to differentiate ourselves from the competition, our customers or clients will spread the word. But don't make the mistake of considering that to be free advertising – it'll only come about as the byproduct of perseverance and concentrated effort on your part.
The overarching strategy for developing this kind of self-perpetuating, positive buzz about your business embraces every facet known as customer loyalty. You have to do much more than meet the expectations of those you serve – you have to far surpass them. The term "value-added" has degenerated into little more than a meaningless cliché, but it does come down to providing those you serve more than they were expecting. But doing this in a way that yields benefit to the recipient and yet remains cost-effective for you requires a bit of a juggling act. You have to ensure that what you're providing doesn't stray beyond the healthy parameters of what would be considered the cost of doing business. Still, it would help if you balanced that with offering something of value and usefulness.
Depending on the nature of your business, this could include providing some instruction or guidance that helps to bring the original transaction to a much higher level. If someone just purchased a product from you, offer something that can enhance the experience the customer has when they actually put it to use. If you interact with a client to develop a service offering to meet their needs, allow for an ongoing dialog to help address those elements that can't be anticipated up front, and that will only come to light as the components of the service fully unfold. People will always gravitate to someone who makes them feel valued, so being able to find ways to augment your product or service offerings to accomplish this will place you in the best possible light.
Irrespective of the type of business you engage in, providing some sort of instructional content, free of charge, can be incredibly compelling. If you can offer an item that can be created at low or even no cost to you, you'll be well positioned to become that source of added value. Be wary if you choose this path because you don't want to give away everything you know for free. The proper balance involves crafting what's known as a lead magnet – something to establish a meaningful connection without requiring any monetary response from the recipient. Offer helpful information that has real-life applications and will make a positive difference. Be careful not to reveal all of your trade secrets and go into every scrap of minutia. There will always be room to offer paid content at a later stage, but giving something of merit upfront will seal the deal. You'll be viewed as a subject matter expert and a source of guidance worth listening to.
It can also be worth investigating ways to incentivize repeat business from the people you serve. If it's financially viable, explore how to offer a discount when a customer or client returns. This can also be applied to the concept of customer referrals. If someone you've served is enthusiastic enough about their experience to send another customer your way, reward them for taking the initiative to recommend you. This dramatically transforms the organic word-of-mouth experience into a much more impactful means of promotion. Best of all, providing stellar service to those new customers can set the cycle in motion again as they send someone else in your direction.
The final critical component in the customer loyalty equation involves garnering feedback from the people you serve. Everyone likes to feel that what they say is important, so find relevant ways to gather customer or client perspectives via online surveys. Make rating their experience with your company as accessible and straightforward as possible, and people will be more apt to invest the time to share their thoughts with you. Couple this with a practical way to disseminate and apply the information you gather, and you can radically reshape your approach to those with whom you do business. If someone suggests a change in your operating structure and you implement it, you'll clearly identify your business as one with which people can have a genuine, productive connection.
Never rest on the laurels of merely launching a business. Even if there's no immediate financial benefit from doing so, seriously consider the role that customer retention needs to play amid everything else you have going on. Doing so can help to ensure that your next customer will become the one who brought someone else to you rather than simply the one who got away.
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